To Like or Not to Like: Facebook Like-Gating and Apps

Here at Paperlabs designing iOS apps is only a part of what we do – marketing those apps takes us just as much time and effort. Having a break-out hit in Apple’s App Store is not easy, thanks to the noise that thousands of apps updated daily make. Our app Tapfolio, a simple but slick $3.99 stock portfolio manager for iPad, was released in early November 2011 with a reasonable marketing budget and to a great reception, partially thanks to our 99-cent introductory pricing.

As Christmas holidays came upon us we knew we couldn’t miss this once-a-year opportunity to learn more about our users, so we decided that instead of trying to make more money during the frenzied holiday season, we would make Tapfolio free for two weeks with a goal of expanding and engaging our userbase.

Going from paid to free generally raises the download numbers, but Christmas is a very competitive time of year for acquiring users. We needed to do more to stand out: hence more advertising was booked for the holiday promotion, including about $5,000 in AdWords ads – all this to promote our *free* app. AdWords ads were targeted at iPad users interested in finance sites.

We wanted social engagement from our users – Likes, tweets, etc. – but our app doesn’t have a strong social loop (yet!). Fortunately, App.net, who also hosts Tapfolio.com for us, offers a very clean Facebook tab for iOS and Android app developers.

The App.net Facebook tab allows you to “Like-gate” your Facebook page, obscuring the app’s download link until the user presses the “Like” button (you can find more information on App.net’s Facebook features page). We love App.net’s platform, but you can do something similar with a number of other services.

Questions

So we can technically hide the free download link on the lander until the Like button is pressed, but will our visitors mind?

How many customers will we lose by tightening the funnel like this?

And finally, will the lure of Free help overcome the resistance of Liking something they haven’t seen yet?

Steps and Results

We directed some of the AdWords traffic to a split-test rotator that had an even chance of sending users to either our regular Tapfolio homepage lander with no Like-gating or our Facebook page with Like-gating. This allowed us to compare the impact of our Facebook lander on the number of downloads we get.

To be fair, savvier users can circumvent Facebook’s Like-gate by going to the Wall link in the sidebar or searching for our main site, but on the flip side some of our regular downloaders sought out and Liked our Facebook page just to share the free offer with their social network.

Split-test results were eye-opening, we isolated a single period with about 1,000 visitors to each side of the split-test to make the comparison clearer:

Now, activations are actually lower in the funnel than Likes and downloads – not everyone who Likes and downloads an app will actually run it that day (what we call an activation). We have measured our activation rate for this version of Tapfolio to be 62%, which means 38% of people who downloaded our app didn’t actually try it right away. This is quite normal for apps that are free for a limited time, as users want to capture the free offer even if they’re not able to try the app right away.

Knowing this, we can project the number of Likes we received for those 93 activations: dividing 93 by 62% to get 150 Likes.

Using the Like-gated Facebook page reduced the conversion rate of the campaign by 7.42% (absolute), to under-perform the control group by almost 50%. To put it in other terms: Each 2 Facebook Likes cost us roughly 1 user of the app.

Was it worth it?

Our Facebook Likes shot past 500 as we neared the end of our 2-week test. To put that in perspective, we had about 50 Likes in the six weeks prior to this test, and our app was well reviewed and liked. Although we lost hundreds of potential users during this time we are now able to communicate with and learn from those who took the time to Like our page. This will not only allow us to learn more about what they think of our app, to help us make it vastly better for the next version, but it will also enable us to expand our marketing onto a brand new social channel. How we plan to do that is a topic for another day.